DEVELOPING AN ONLINE
NEWSPAPER BUSINESS MODEL
LONG DISTANCE MEETS
THE LONG TAIL
Online Newspaper Backgrounder Revenues up, market share down Online ad gets 20-30 % of print ad’s worth Online profit margins half of other media
Current Models Pay-by-view Free Free w/some pay-by-view Result: Publishers say, “Online is key, but I
won’t be experimenting or doing anything positive about it as part of my investment strategy” (WAN 2006 survey)
The Search for Competitive Advantage
Implies: Resource-based view theory Suggests: A firm’s strengths lies in its
resources The place to start: A firm’s value chain Process: Dis-assemble, then re-assemble
the parts or elements to meet the new market’s needs
Then what? Core competencies Mistake: Match products w/demographics Better: Deliver convenience,
comprehensiveness, timeliness; not a niche Examine assets for value, from customer’s
viewpoint, but also for “inimitability”
Distance in Online Context Online = global reach Online value in eyes of customer “Proximity” takes on new meaning in online Two online audiences:
local and long-distance (Chyi & Sylvie, 1998 & 2007)
Distance audience basically ignored
Along Comes the Long Tail LT: In distributing a commodity, info tech –
specifically the Internet – increases the share of niches (Anderson, 2006).
Online Benefit: Internet markets arm audience members with search capabilities.
A Big “But”: The consumer – not the newspaper – determines the product (GLT)
Key: Partnering & Distribution
Why?: Media have intended & unintended uses, rendering the newspaper ill-equipped in marketing, audience knowledge, delivery systems and context of use.
So: Make news for non-newspaper delivery vehicles
Such as?
Possible Partners Mobile media; it…
moves
has willing-to-pay users
headed to broadband sophistication
allows time shifting
is growing in use
Possible Partners (cont.) Local, retail businesses; they…
$ aren’t classified ads
$ attract people and invite socializing
$ have bonded with their customer bases
$ are venues that make papers unobtrusive
$ invite informational searching
$ spend $ online
GLT Pluses Content-as-search eliminates much guessing
about what attracts consumers. Searchable content resolves usability design
issues and provides “original” content and eliminates need to ally with a popular browser to drive traffic.
Offers a sense of community without imposing the journalist’s or editor’s view of that sense.
Challenges
What’s Not to Like?
Challenges (seriously) Training – creating value for some, learning
value for others Organization – serious local R&D Organization – outsourcing Organization – tech infrastructure (search
interface) Organization – planning (continuously)